1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
andrezito [222]
2 years ago
5

Consider a call option on an asset with an exercise price of $100, a put option on that same asset with an exercise price of $10

0, both expiring at the same time. Assume that at the expiration, the current market price of the asset is each of the following two values. Explain what happens from the perspective of the long position for each of the two options.
Business
1 answer:
zubka84 [21]2 years ago
5 0

Answer: The values are missing below are the values

a. $105

b. $95

answer :

a) $5

b) -$5 ( loss )  

Explanation:

From the perspective of the long position for each of the two options  upon expiration

a) For $105

for the long position ( long call ) since the expired price > than the exercise price

i.e. $105 > $100 the profit = $105 - $100 = $5

b) For $95

For the long position ( long call ) since the expired price < than the exercise price

i.e. $95 < $100 the profit = $95 - $100 =  - $5  ( a loss is incurred )

You might be interested in
Kickstarter is known as a(n) ___ website because it allows the general public to provide financial support to organizations and
Rufina [12.5K]

Answer: crowdfunding

Explanation:

Crowdfunding is when a project is being funded by collecting little amounts of money from the people, usually through Internet.

Kickstarter is known as a crowdfunding website because it allows the general public to provide financial support to organizations and individuals that are working on a new product.

7 0
3 years ago
Why does a surplus exist under a binding price floor?
klemol [59]

Answer:

it makes the price so low that the quantity demanded exceeds the quantity supplied on the legal market.

7 0
2 years ago
A credit sale of $750 is made on June 13, terms 2/10, net/30. A return of $50 is granted on June 16. The amount received as paym
saveliy_v [14]

The amount received as payment in full on June 23 is $686

Explanation:

Given ,

Credit sale of $750

Terms 2/10, net/30

$50 is granted on June 16

= (750-50)x 0.98

= 700 x 0.98

= 686

The payment is reported as a repayment to the accounts receivable. Make an equivalent debit to the bank account to accept the earned money as a payment

4 0
2 years ago
Black systems sold and delivered modems to white computers for $330,000 to be paid by white in three equal installments over the
patriot [66]
Why are they giving $110,000 more?
5 0
3 years ago
Investing in stocks and bonds is risky because it is possible to lose all or part of your principal.
Aneli [31]

It's true investing in stocks and bonds is risky because it is possible to lose all or part of your principal.

Investors are unlikely to demand the same returns on their stock investments year after year. Market yields can be expressed as the sum of government bond yields and market risk premiums.

Yes. If you sell bonds before their maturity date, you may incur a loss as the sale price may be lower than the purchase price. Also, if an investor purchases a bond and the company faces financial difficulties, the company may not be able to return all or part of the original investment to the bondholders.

Learn more about bonds at

brainly.com/question/25965295

#SPJ4

8 0
2 years ago
Other questions:
  • Assume that a profit maximizing monopolist is producing a quantity such that marginal revenue exceeds marginal cost. we can conc
    13·1 answer
  • Jake receives a promotion at his law firm after winning an important case. this is an example of a:
    12·1 answer
  • Which of the following is not included in the interest calculation using adjusted balance method?
    12·2 answers
  • 5. Consider the following semiannual bonds: Bond C%(per year) Maturity(years) A 0% 15 B 0% 9 C 5% 15 D 11% 9 a. What is the perc
    7·1 answer
  • Price elasticity of supply is used to gauge
    6·1 answer
  • Michael is the project manager in a Manufacturing Company he wants his organization to use technology for higher revenue and pro
    8·2 answers
  • A prospective borrower has an estimated monthly housing expense of $486, and his monthly obligations total $684. If the borrower
    12·1 answer
  • The Thomlin Company forecasts that total overhead for the current year will be $11,415,000 with 180,000 total machine hours. Yea
    13·1 answer
  • You get a $3,000 loan at 9% interest for 120 days. The lender uses a 365-day year. How
    9·1 answer
  • chloe receives her first paycheck for working as a pretzel vendor. to which of the arrows does this transaction directly contrib
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!